New State Pension Guide

falcon4us

GunJack said:

@falcon4us The hybrid system was always going to produce winners and losers (but the "losers" were never going to be any worse off than if the old rules had stayed).... you just hit SPA before you could take full advantage of the new system so couldn't get enough post-2016 years to take it up to the full new SP....you still "won" by being able to get 3 post-2016 years  

Thanks, but my issue was never about being a winner or loser in the hybrid pension system.
It is what it is, and I accept there's not much I could have done about my SPA!

It was about explaining the discrepancy between the pension I eventually received for making 3 post 2016 NI payments and the maximum attainable figure quoted by Futures Centre.

As it turned out, this arose as a result of an unusual 'flip' where extra pre-2016 NI payments cause a re-calculation of the 2016 starting amount. (Royal London guide explains)

I also have no issues with the COPE deductions to state pension and appreciate that I have gained more than those payments as a result of my membership of a defined benefit pension scheme.
  


 

jouef

Do I have a qualifying year for national insurance from my employment in 2019-20? My online record says ‘We are checking this year ...’ but I need to know quick so I can pay voluntary class 2 NI (under my self employment) by 31/1/21 if I haven’t qualified. I was paid monthly as follows:
(a) 6 months below LEL at between £0 and £510, no deductions, total gross £909;
(b) 1 month between LEL and PT at £544, no deductions, total gross £544;
(c) 5 months above PT at between £887 and £1130, total NI deducted £171 from total gross £5026.
So overall I grossed £6479, which is above the annual LEL of £6136. However, my earnings during months in which I exceeded monthly LEL are only £5570. Am I caught in a trap where pay periods, not yearly total pay, determine whether I qualify?

t0rt0ise

You'll have to call them, or use the chat contact if you can find it. I did this back in September and they told me how much to pay and gave me a reference number to pay via my bank online.

jouef

t0rt0ise said: You'll have to call them, or use the chat contact ... etc

Thanks. I sent a chat request but no answer yet, so had to pay voluntary Class 2 (being self-employed as well as employed in 2019-20) to be on the safe side as I need full NIC years. I found a partial answer in an article by Steve Webb. It does not address multiple employments, variable pay periods or give full examples, but it seems the following applies:
(i) Determine your pay periods during the year (weekly, monthly etc);
(ii) Disregard any pay periods in which pay was below the LEL for that period (ie that period’s proportion of annual LEL);
(iii) If the remaining pay periods add up to the annual LEL or over, you have a qualifying year. If not, you don’t.
If you paid NIC in some periods but still did not total the annual LEL, you don’t qualify. If you were over LEL but under PT, you can pay no NIC but be credited a full qualifying year. No wonder HMRC don’t explain it. It’s daft.

alijo20122012

Hi, 

I have terminal cancer so will not reach pension age. Is there any way to claim back my state pension or what will happen to the funds once I have died? 

I tried contacting pension services but they are not dealing with general enquires due to Covid.  

Many thanks 

Alison

Silvertabby

alijo20122012 said:

Hi, 

I have terminal cancer so will not reach pension age. Is there any way to claim back my state pension or what will happen to the funds once I have died? 

I tried contacting pension services but they are not dealing with general enquires due to Covid.  

Many thanks 

Alison

I'm so sorry.

No, it's not possible to claim State benefits early, but are you entitled to other State financial support?  If you have a Marie Curie or McMillan support nurse, then they should be able to check this for you.

If you are married, and your spouse is also under SPA, then they will be able to claim (non means tested) bereavement benefits based on your NI contributions.

Do you have any private/occupational pensions?  Different rules apply to these, which can normally be taken early on the grounds of serious ill health.

p00hsticks

alijo20122012 said:

Hi, 

I have terminal cancer so will not reach pension age. Is there any way to claim back my state pension or what will happen to the funds once I have died? 

I tried contacting pension services but they are not dealing with general enquires due to Covid.  

Many thanks 

Alison

Sorry to hear that - my late brother was recently in a similar position, and I know it isn't easy.

As Silvertabby says, there is no way to claim your state pension early - perhaps one way of looking at it would be to think that NI contributions are basically a tax which not only go towards paying State Pensions (for todays pensioners), but also towards the NHS and to working age benefits, and that the money you perhaps won't see in State Pension you may see in other benefits such as PIP and towards other benefits and medical care.

I know in my brothers case we worked out that a single course of the chemotherapy he was having probably cost more that the NI contributions he had made in his entire 40-year working life. Also you may well be entitled to Personal Independence Payment (PIP) - a nons-means tested benefit intended to cover some of the additional costs associated with your illness. Your Macmillan nurse should be able to provide you with details and help you apply if you haven't already - with  a terminal diagnosis the claim can be fast-tracked and the payment can arrive quite quickly.

As Silvertabby also says, if you have any private pensions, then if your prognosis is for a life expectancy of less than twelve months and it is a DC pension, you may find you are able to access it early and take the money tax-free.

[Note: I originally mistakenly said DB rather than DC in the last sentence - now editted to correct]

davetez

I have made 41 years of NI contributions & according to the gov pension forecast I still need to make contributions for another 3 years to get my full state pension entitlement.
Im confused as to why the figure is lower than expected?
If I only need 35 years to gain a full state pension is this because it looks at the last 35 years up to my state pension age 67? I've taken voluntary redundancy at 57 so there's potentially a 10 year gap.

OR is it because I've been contracted out of the state pension through work?
Does the state forecast include the COPE amount or will I receive that separately through either my final salary scheme or "pension pot" if I decide to transfer out.

Dazed_and_C0nfused

You have misunderstood the new system.

You are under transitional rules so having 35 years doesn't matter.

If you Google Royal London State Pension guide you should find a document which explains everything quite well.

p00hsticks

davetez said:

I have made 41 years of NI contributions & according to the gov pension forecast I still need to make contributions for another 3 years to get my full state pension entitlement.
Im confused as to why the figure is lower than expected?

If I only need 35 years to gain a full state pension is this because it looks at the last 35 years up to my state pension age 67? I've taken voluntary redundancy at 57 so there's potentially a 10 year gap.

It's because, as Dazed says, you are under transitional rules - the 35 year rule only applies to those who started their working lifes since the introduction of the new State Pension in 2016. At this point, for those who had started work but not yet reached retirement age, two calculations were done for each individual, one using the old and one the new rules, abd the higher of these tow became your 'starting amount'. Each year since then adds 1/35th of the new State Pension amount until the maximum amount is reached.

davetez said:

OR is it because I've been contracted out of the state pension through work?

Probably , yes. Those of us who were contracted out for much of our working lives would have paid a lower rate of NI pre-2016, and the 'new' starting calculation took this into account by subtracting a COPE figure, which means that the amount calcuated under the old rules was usually higher and therefore became our starting amount. But because the old basic state pension is considerable lower than the new one (£137.60 compared with £179.60) those of us who are still under State Pension Age  get another bite of the cherry and can add further years to bring our amount up to the new maximum. up you

davetez said:

Does the state forecast include the COPE amount or will I receive that separately through either my final salary scheme or "pension pot" if I decide to transfer out.

The COPE amount is the amount of additonal state pension that you would have received if you had been contracted in instead of contracted out. It is neither added to or subtracted from the forecast amount shown. The fact that you were contracted out would suggest that you should have a private pension somewhere that will pay at least (but not necessarily exactly) that amount.  

davetez said:

"pension pot" if I decide to transfer out.

Good luck with that one - at present, as discussed frequently on the board, it's pretty much impossible to transfer a DB pension out except in exeptional circumstances (such as being terminally ill).

Dazed_and_C0nfused said:

If you Google Royal London State Pension guide you should find a document which explains everything quite well.

The Royal London 'Topping Up you State Pension' guide takes you through the process - unless you have a short life expectancy, making voluntary contributions for the years you are missing is very good value for money.